There are signs that the commodities rout is bottoming out, but iron ore prices still face downside risk, BHP Billiton's chief executive told CNBC on Wednesday.

Andrew Mackenzie admitted that the "collapse of OPEC" and sustained slide in oil prices caught the mining giant by surprise, although "there are some signs that may have bottomed", which may stem the spillover on other commodities, he said.

In December, the Saudi Arabia-led Organization of Petroleum Exporting Countries declined to cut production, even amid a global oil oversupply, leading to further price falls. Subsequent attempts by OPEC and non-OPEC producers to agree a deal on production levels have so far proved fruitless.

But the mining boss had a less positive outlook on one of BHP's key product.

"The reality is ... the supply of low-cost iron ore continues to grow at a faster rate than demand is increasing," Mackenzie said on the sidelines of the Australian Financial Review Business Summit in Melbourne.

"So, of all the products that we produce, it has the greatest risk of price downside, but we still make the most money in it. So, if we can continue to reduce the cost of producing iron ore in Australia, we can win market share, and we can still make appropriate profits."

Iron ore prices had jumped almost 50 percent since the beginning of the year to around $63 a ton last week, in part on hopes that China would boost economic stimulus.

But prices have since come off to trade around $52, and Mackenzie attributed the spike to traders covering their short positions.

In February, the world's biggest diversified miner reported a net loss of $5.67 billion for the first half of the 2016 financial year, its first loss in more than 16 years.

The company also ditched its progressive dividend policy, which held that it would pay a steady or higher dividend at each half-year result.

Mackenzie said at the time that slower growth in China and OPEC's moves had resulted in lower prices for BHP's products, which meant it needed a new dividend policy and capital allocation framework in order to manage volatility.

Mackenzie said on Wednesday that he remained positive on China. Despite slowing commodities demand, the country's 1.3 billion-strong population and its growing middle class meant that there was still upside in the longer term for the world's second-largest economy, he said.

"The good news coming out of China is that they are managing the transition to more of a services-led economy," he said.

"They are taking advantage of the employment it gives them to restructure some of their heavier industries to make it more competitive, which does mean in the medium-term they are probably going to demand less commodities than people might have thought, but in the longer term they will demand more."